J.C. Penney's ongoing drama not helping vendor confidence

J.C. Penney shares are plunging as the company plans to raise a billion dollars through a new stock offering, an event that caught many people on Wall Street by surprise, since Penney's CEO, Mike Ullman, reportedly told investors at a meeting that the company had no plans to do so anytime soon, according to two sources who attended the meeting Wednesday morning.

The retailer's stock closed Friday at $9.05, down $1.37 or 13.2 percent.

Other media outlets, citing their own sources, corroborated the comments, but Ullman said he never made those statements.

"We have no idea who the source of these purported statements is. What we can say is that these statements attributed to Mike are completely false," the company said in an official statement.

A key issue for J.C. Penney has been vendor confidence. The company released a formal statement to CNBC saying "J.C. Penney's vendors are very supportive. We are paying them on time and have not heard any issues with regard to factors."

But something must have happened over the period of the day. In the company's investor call, just hours later, to discuss the new 84 million share offering, CFO Ken Hannah said, "Proceeds will go on our balance sheet and take away the concern that our employees and our supplier partners have ... to give them a vote of confidence."

It was also later reported by Dow Jones that a smaller factor named Rosenthal & Rosenthal raised the surcharge it imposes on Penney's suppliers.

If all that weren't enough, Penney also revealed in an 8-K filing that the company's controller had left effective Sept. 20.

As for its business, on Thursday the company said it was "pleased" with its turnaround, and that it still expects to post positive comparable sales trends coming out of the third quarter and throughout the fourth quarter.